Spanish food manufacturer Ebro Foods reported has mixed first-half numbers with underlying net profit up but sales staying flat and the company’s EBITDA falling.
Ebro said yesterday (27 July) that net profit from continuing operations was up 1.1% in the first six months of 2011 to EUR56.8m (US$81m). Turnover was “more or less on par” with the previous year at EUR839.6m.
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The company’s EBITDA fell 9.8% to EUR117m due to durum wheat prices nearly doubling against the same period of last year – from EUR180 per tonne to EUR340.
The company has increased pasta prices twice in France and North America, but says it may have to increase them again in September or October unless durum wheat prices come down.
Ebro also pointed to a EUR4.2m hit from foreign exchange and said a third factor was a delay in starting up its planned rice plant in Memphis. The delay made it “impossible” for Ebro to achieve the savings it had planned. The company estimates that the site will be fully operational by the end of the year.
Despite the challenges, Ebro said its consolidated results show that it is a “healthy company”. The “underlying evolution of our businesses”, the company argued, “is very satisfactory”.
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By GlobalDataIt added: “We have maintained our market shares through heavy investment of over EUR41m in advertising, our European businesses continue their positive evolution and both the rice and the pasta divisions have put new products on the market.”
Ebro said it expects “part, if not all” of the adverse external effects will be eliminated in the second half of 2011 and said it believes its rice and pasta business will regain ground by the end of the year.
